No, it’s not a new form of diversified livestock management – unicorns, gorillas and gazelles are terms used to describe businesses in various stages of growth and success. The final of our GROW agri-tech business plan competition has got us looking at the global deal flow into agri-tech and how start-ups are developing.
While other, more mature sectors have examples of companies in these categories, “agri-tech” has needed time to begin to deliver this menagerie of success.
Unicorns are start-up companies that end up valued at over $1 billion, gorillas are market share leaders whose business is based on proprietary technology, and gazelle companies have increased their revenues by at least 20% annually for four years or more, starting from a revenue of $1 million.
Attractive for investment
With the final of GROW approaching we have been looking at the global landscape – how much is being invested, who are the rising stars, where the smart money is going, and how this is shaping the industry and the businesses within it.
According to the brilliant AgFunder “AgTech Investing Report,” 2016 saw $3.23bn invested across 580 agri-tech deals globally. The US attracted most of the deal flow (but this was still less than half of the total), followed by Canada, India, the UK, Israel and France.
Being the 4th most attractive market for private investment into agri-tech globally is pretty impressive – but for the UK, a relatively modestly sized market that has always punched above its weight in science and technology development, perhaps not completely unexpected.
Yet this is no time for complacency.
Keep an eye on the exit
Unlike those in other more mature industries, global agri-tech deals have yet to deliver impressive and reassuring exits for investors. At Agri-Tech East, we work with many companies seeking investment at various stages of their development, and one of our most common questions to them is about the expected size and scale of their exit – when can their investors expect to get their money back – plus more! We always encourage people to be really clear on the investment proposition – “how much”, and “by when” are the questions we know the investors will ask.
Mergers and acquisitions are an important ways of exit – as well as being an indicator of the interest among larger businesses to acquire the assets, people and technologies of another organisation. Here the UK has had some success, with BioLine (biocontrol products for agriculture) and Silent Herdsman (a sensing/ Internet of things business for livestock management) leading the pack.
GROWing investment opportunities
Growing a start-up to the point where it becomes an attractive proposition for acquisition is a big challenge – and in the UK we are fortunate to have investors with appetite to invest and entrepreneurs working hard to grow their businesses and deliver benefits to farmers.
Our GROW business plan competition is the very start of the agri-tech commercial innovation pipeline – the fact that eager investors are always looking for high quality deal flow was our inspiration to create the competition. Admittedly it’s a modest contribution to the UK’s effort to breed agri-tech inspired gazelles, gorillas and unicorns, but one that we hope will one day pay dividends.
Literally.
Come along to our GROW final on Monday 19th June to help decide who receives funding to further their business idea – click here for more details.
